Industry-watchers say that robotics technology is growing more sophisticated and can increasingly perform a wider range of tasks and collaborate with humans. This article examines the potential impact on distribution operations.
This article is part of MDM’s Disruptive Technologies Special Report.
Robotics today encompasses more than the Hollywood vision of a bunch of Star Wars’ R2-D2s running around warehouses, picking and packing orders. The definition can be expanded to a much wider spectrum of technology, says Guy Blissett, specialist leader for wholesale distribution for Deloitte Consulting.
“I think it is worth embracing a broad definition or vision of robotics and automation. Robotics doesn’t have to be a humanoid-like machine with arms and legs and a head that can walk. Robotics can take many different forms,” he says. Robotics can include pallet shuttles and automated storage retrieval systems, as well as automatic guided vehicles and autonomous indoor vehicles.
Material handling robots can be used for tasks such as bin picking, case and pallet transportation, robotic pick-and-place solutions, conveyor design, lift-assist systems, integrated sortation systems and more, the Robotics Industry Association says.
These systems continue to grow more sophisticated and can increasingly perform a wider range of tasks and collaborate with and even learn from humans, according to a report from Deloitte, Intelligent Automation: A New Era of Innovation.
Thanks to its purchase by Amazon in March 2012, one of the most widely known robotics companies is KIVA Systems. KIVA Systems uses automation technology for distribution centers that incorporates mobile robots and control software. These orange ottoman-shaped robots are sent on missions by a central computer system to retrieve inventory pods that are brought back to pick and packing stations.
These robots can handle up to 1,000 pounds of weight and are equipped with a rechargeable battery system, as well as internal sensors that allow the robot to move freely within a warehouse without crashing into other robots or things.
According to the Material Handling & Logistics U.S. Roadmap, robots today are more capable, more intelligent and less costly than at any other time in history. And A Roadmap for US Robotics – 2013 Edition, quoted by the same report, says that by 2025, any technical and economic obstacles such as the ability to easily and effectively identify items and manipulate a picking arm to pick them will be overcome.
Jon Schreibfeder, an inventory management consultant in wholesale distribution and manufacturing, says that he is seeing more and more automation in the warehouse, including pick-to-light and voice-picking systems, as well as automated shipping conveyor systems.
“I’m not seeing that much in terms of actual robots in the warehouse yet, but I’m sure it’s coming,” he says. On the other hand, he has worked with companies who have implemented driverless carts that are directed through the warehouse via sensors in the floor.
It is difficult to imagine robotics and automation not playing a key role in distribution centers in the future, according to Ken Tinnell, robotics general manager of the robotics integrator Bastian Solutions. “We believe we will see a massive amount of adoption. We don’t think we can fill the demand in the next five years without pretty significant growth on our side,” Tinnell says.
Robotics integration is not only realistic for Fortune 500 companies. Small to mid-sized distributors can take advantage, as well, industry observers say.
“The question shouldn’t necessarily be should I or should I not buy a robot,” Blissett says. “But how might robotics transform the value chain around me, and what role might I play in accelerating that transformation?”
The Growth of Robotics
The automotive industry has been using traditional robots for decades. And according to the Robotic Industries Association, the automotive industry still represents more than half of total orders, but non-automotive industries are rapidly increasing their orders of robots.
Top industries for growth in the first quarter 2014, according to RIA, were food and consumer goods (up 91 percent), plastics and rubber (up 55 percent) and life sciences (up 36 percent).
“In total, the overall number of robots ordered for use in non-automotive industries grew 18 percent over the first quarter 2013,” says Jeff Burnstein, president of RIA. That compares with the overall units ordered increasing by 1 percent.
While much of the growth is in manufacturing, the robotics industry is also seeing increased interest and adoption for use in warehouses.
“Thanks to the automotive industry, they have improved the reliability by giving feedback to the robotic manufacturers that are now making a highly reliable piece of equipment,” Tinnell says. “Ten to 15 years ago, a robotic arm would cost a million dollars. Now you can buy that same robot for $50,000. That is a 95 percent decrease in cost.”
In the highly repetitive manufacturing environment of the automotive industry, robotics technology was refined, proving robotics to be a sensible business option and advanced enough to be refurbished into a solution for distributors.
The Business Case
“The use of automation will continue to drive more efficiency, improve performance, reduce processing time and lower cost for distribution operations,” says Ken Ruehrdanz, distribution systems market manager of Dematic.
Robotics and automation integrators such as Aesynt, Dematic and Bastian Solutions see their roles as educating distributors about the wide array of robotic and automation solutions available. They are also focused on building a business case for their solutions.
“Customers we work with are just learning about the opportunities at a higher level. For the longest time, their vision was siloed and not very opportunistic. I would say companies are gun shy,” says Neil DiBernardo, director of professional services of Aesynt. “You have to change their viewpoint on robotics.”
Aesynt’s ROBOT-Rx is a medication vending machine that fills prescriptions. The robotic system was originally developed by pharmaceutical distributor McKesson Corp. It was sold to a private equity firm in late 2013 and renamed Aesynt.
The system allows pharmacists to spend more face time with doctors and patients. The robot picks the medication and places it in bar-coded envelopes. These envelopes are sent to the pharmacist, and the barcodes connect through a computer system that automatically records patient history and drug inventory.
In a warehouse, the application of robotics and automation could shift the work in distribution centers from a person-to-goods process to a goods-to-person process.
This shift from having a worker walk through distribution centers to retrieve goods to robotic and automation systems bringing items to the worker not only makes business sense but also can help the attitude of distribution center workers, says Lou Mangino, vice president of operations at Benco Dental, Pittston, PA, a distributor of dental supplies and equipment.
Benco Dental has used a Dematic zone-routed conveyer system in its distribution centers since 2002. Mangino says the system “just makes life easier.”
Mangino says Benco has seen a 15 percent to 20 percent productivity increase since installing the convey and sort systems in its distribution centers.
“You are using a machine that you pay for once, that you have to feed and care for a little bit, that just provides a ton of benefit not only for the associates but for the customers,” Mangino says. “You get more accurate picks, you get more efficient picks, and you reduce your overall cost structure. So you are passing that along to bottom-line company profits and benefits to your customers.”
Tinnell says cost is falling for the systems themselves. “For distribution centers, cost is very much in their favor, and that is why there is such a rapid adoption of robotics right now,” he says. “Typically returns on investments for robotics right now are less than a year maybe two depending on what they are doing.”
But distributors should always consider why they want to implement this technology, and not just implement new technology for technology’s sake, Schreibfeder says. “With any technology we have to see a payback in a reasonable amount of time.”
Robotics integrators like Bastian Solutions offer the ability to retrofit and refurbish robotic systems as a company’s business model changes. These companies hope this flexibility will increase distributors’ adoption of the technology.
Baxter, a robot produced by Rethink Robotics, is one of the most humanoid-like robots in industrial robotics. Baxter is designed to work alongside workers using a behavior-based “common sense” interface that can be taught in 15 minutes.
There is ongoing fear that robotics will eliminate jobs in distribution centers and other industries. The Deloitte report encourages companies to develop talent strategies, such as staffing and training, to adapt to how automation changes job descriptions and organizational models.
Benco focused on maintaining the people side of distribution when integrating robotics into its operations. “We really tried to engineer this into the system. How can we make the system better for the employees?” Mangino says.
Distributors considering adopting robotics or automation into their warehouses should adjust their perception of robotics to take advantage of the technology, Aesynt’s DiBernardo says.
“The more progressive the customer is, the more opportunities we can help them with,” DiBernardo says.
Finding a good technology partner is critical. A distributor should work with an integrator who will match its technology to the company’s needs. “Balance the technology you want to use with the ROI and the size of your business,” Benco’s Mangino says.
A company should visit other distributors using robotics or automation to find the technology that fits best with its needs.
A distributor should also ensure that the system it chooses can easily add technology later to accommodate the business as it evolves.
The last step is modeling.
“Definitely model because modeling will really tell you what automation/robotic system you will want to use,” Mangino says. “We marry up the system based on our volumes and our needs at the time.”